Greece is bracing for a repeat general election after its centre-right leader failed to win leftwing support to form a “national salvation government” in the wake of Sunday’s inconclusive outcome at the polls.

“We are now heading for a second vote next month in a deeply polarised atmosphere,” said a disappointed government official. The repeat election would probably take place on June 17, he said.

Decision-making on further reforms, including finalising a new €11.5bn medium-term austerity package, will be stalled until a new administration is in place.

“Only non-political measures can go ahead,” the official said, admitting that it will be hard to push forward with 77 separate structural reforms due to be completed during June.

The stalemate puts at risk the timetable for disbursement of Greece’s next loan tranche from its second €174bn bailout. Despite a recent transfer of €3.5bn to cover financial emergencies, the country faces being unable to meet pension, salary and debt commitments next month.

The European Union and International Monetary Fund have warned they will block further loan disbursements until the next Greek parliament approves the medium-term package, which would include deep cuts in healthcare spending and in public sector employment – measures that triggered parliamentary rebellions under the two previous governments.
June 17 Elections on the Way

Let's hope this is the end of the end of the insanity in Greece instead of yet another package of proposals that sinks Greece further into ruin for the sole purpose of bailing out French and German banks.

The sooner Greece tells the Troika "Go to Hell", the sooner Greece has the potential to be on the road to recovery.

The keyword in the above sentence is "potential". Greece has a zero percent chance under Troika proposals. However, unless Greece adopts genuine reform on work rules and pensions, it is headed to the gutter, bailouts or not.

Related

Last week in “Portugal’s Left Wing Forces Threaten Troika Revolt,” we highlighted the country’s Socialist Party which is enjoying a lead in the polls ahead of elections expected in October and which has pledged to implement a “reverse policy” as it relates to austerity and the country’s creditors. We argued that the ascendancy of left-wing political parties across the periphery means Europe will take an increasingly hard-line stance in negotiations with Greece. Here’s how put it:

Odds of a lasting coalition are slim given the massive vote against the austerity coalition. Fotis Kouvelis, SYRIZA party leader and second place finisher in the elections repeated his position that cooperation with New Democracy and PASOK was not in his intentions.
Moreover, Greece's Democratic Left party refuses to join any pro-bailout coalition.

I am amused by the Financial Times headline Tsipras shrugs off gaffe about Hollande.
When Evangelos Venizelos, the Greek socialist leader, boarded a 7.30am flight to Paris on Tuesday, only his closest aides knew he was on the way to a hastily arranged meeting with the French president.

ATHENS: Whatever the outcome of Greece's election on Sunday, seen as too close to call between Alexis Tsipras' Syriza leftists and Vangelis Meimarakis' New Democracy conservatives, markets appear confident its bailout will not hit the buffers. Under the country's third, 86 billion euro ($98 billion) rescue brokered in August, the winner will need to oversee deep economic reforms, a recapitalisation of the country's big four banks and the unwinding of capital controls imposed in late June to prevent the collapse of the financial system.

In the past week, as I expected, the ECB, Troika, German officials and others have all warned Greeks to not vote for Alexis Tsipras and his radical-left party Syriza. The question is will it backfire.
I suggest it already has. The pertinent question is whether it backfire enough to matter.
Please consider Greeks rail against 'crude' German editorial.

The talks still continue but good news is on the horizon as yet another political party, the Democratic Left, has backed out of the Unity coalition.
Please consider Greece's moderate left says no government possible
The moderate Democratic Left party in Greece says it will not join pro-bailout parties in a coalition without the more radical far-left Syriza.

Assuming no defects in Pasok or the New Democracy parties, the pro-austerity may just scrape together enough votes to barely piece together a ruling coalition. How long it lasts is another matter as Pasok was humiliated with a third place showing.
Reuters reports Angry Greeks reject bailout, risk euro exit